Future prospects after short sale (loan, 2013, credit card, financing)

[brian571]

Hello all. First, I want to thank everyone in advance for the wealth of information here. Much more informative and helpful than many of the forums I have been reading. But I didn't see my specific situation addressed, so here we go...

In 2013 I had to take a short sale on a 1BR condo. I purchased it for $68k in 2004 before I was married. When the economy went south in 2009, I lost my job and ended up getting a new one about 65 miles away from my home. We initially moved closer to my new job, put the unit up for sale, and used savings to cover both the mortgage and rent on our new place. Values were still high enough when we left that we could have covered the balance of our mortgage. Unfortunately, nothing was selling and the bottom fell out shortly afterwards. After a year of renting, we moved back into the unit and I commuted 130 miles a day round trip, hoping that things would eventually recover. They never did. In mid 2013, the value of it was down to the low $30s. At this point, we'd drained our savings doing this long term. The recovery we had hoped for never happened and didn't appear to be anywhere close. And we couldn't rent the unit because of HOA rules. Plus, (not that it matters to a bank) a 1BR condo was no longer a good option for us. We decided we didn't really have any other practical options than to cut our losses and sell short. The mortgage was a Fannie Mae loan, so I went through the HAFA program with my lender (a local CU). The short sale closed in August 2013. We were about $25k short on the sale (we owed $55k and it sold for $30k). Not a lot of money in the grand scheme of things, but it was still $25k more than we had at the time and the cost of me commuting had prevented us from saving anything.

Fast forward to today... We've recovered quite a bit since then. We still have some credit card debt, but we're in the process of paying that off. We're looking about two years down the road to (hopefully) get back into home ownership. By that time, I'm thinking we should be able to put around 20% down. We will not have any debt other than student loans ($700/month combined). We have modest retirement accounts (about $20k total - nothing special since we had stopped contributing when things were tight). The houses we're looking at are around $300k and taxes are around 1% of value. My wife and I should have a combined income of around $140k (both full time / salary positions). On paper, I don't think there are any issues with this. The monthly payment would work out to around 20% of our combined take home pay. I'm just wondering what the impact of my short sale will be (my wife was not on the note). Other than that, my report should be relatively good. I missed the last two payments on the mortgage because we'd already moved away (we had an offer to purchase the condo that fell through) and I couldn't afford to pay for two places again. But otherwise, I have 16 years of history and no other missed payments. My wife doesn't have any blemishes on her report. She just has much more student loan debt than I do ($100k versus $5k).

Assuming we put down 20% and have no other debt than student loans, how do you think lenders will look at us? Will we qualify for conventional financing? We should be right around 4 years post short sale when we're ready. Just trying to get ahead of the game and make the right moves now to avoid surprises. Any input is welcome!

(Sorry this is so long!)

[Pfhtex]

VA: 2 years from the date of the short sale
FHA: 3 years
Conventional: 4 years.

Yes there are niche programs, and exceptions, but above is the general rule. You will not face any additional hurdles beyond a brief note (shorter than your post) explaining the short sale, and the letter verifying its date.